Master of Money Management

Retirement has two faces

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On the one hand we are fed images of grey haired tanned folks, sipping margaritas under palms reading classics or  swinging at golf balls on pristine pieces of real estate reserved.  These retirees look like they are in the throes of ecstasy and life could not be better. On the other hand we have been scared us witless by the financial advising community telling us that only 5 in 100 working individuals will be able to retire. We are told that we will be forced to continue working past 65, and this is a really bad fate to endure. The scenario’s are at opposite ends of the spectrum, so which one should we believe?

Unless you are going to be one of the very small minority that saves for at least 30 years and always earns a decent salary, the idyllic pictures we see of retirement are few and far between. However having lots of money is not the only contributor to a successful retirement. One of the key factors to a successful retirement is the exact opposite of living a life of leisure. Many executives lose their sense of purpose when they leave the working environment. The feel that they are at the proverbial “loose end”. In other words they are bored stiff. They simultaneously lose a community, status, and their reason for getting up in the morning. They can often sink into a deep state of depression and even get physically ill.

Humans are hard wired to work, or at least to have a purpose; the phrase ‘dying of boredom’ does not come from no-where. If you are fantasising about early retirement you may be in for a rude awakening. Most people who retire early are back in the job market withing a year. The world has changed vastly since the industrial era when brawn ruled in the factories and workers were unquestioning drones. A set retirement age made sense when the industrial bosses needed strong fit people to keep fuelling their factories, but this is no longer a requirement of the modern world of work. In late 1800’s a man was considered to have had a long life when he died at 46! Now a 46 year old is just warming up!

When the western world finally settled on the mandatory retirement age of 63, the average working male lived until he was 65-67. Now the average male can easily live to 78, and it’s increasing every year. Women are living even longer than that. This poses a huge dilemma-what are we going to do with the extra 20 to 25 years of our lives pastretirement age?  and more importantly, how are we going to fund these extra years?

This leads us to the other aspect of retirement, the not so pleasant, underfunded part. Most people do not have enough for 5 years in retirement let alone 25 years. There are many reasons for this but we can examine them until the cows come home but it will not change the situation for people who are in this position. We need solutions.

So we know that we are a tad short when it comes to funding our retirement, that’s the bad news, but the good news is that we do not have to retire at 65. Why would we want to anyway? We can only sip so many martinis and endure so many daytime soapies. In fact 60 is the new 40, we are fitter and healthier than we have ever been and if we enjoy our work we should keep working, and if we hate out jobs it’s time to ‘refire’as Lynda puts it. Many people are looking for new careers as they reach retirement age, not only for money but for personal satisfaction. This relieves an awful lot of pressure on our retirement funding. If we can delay drawing from pensions for 5 to ten years it could solve some major head- aches.

The bottom line is that most of us will not be able to afford to retire at 65, let alone 40. So if you you are smart, you will be planning to live to 100 and working until you no longer want to, rather than retiring  at an arbitrary age that government dictates. If you don’t like what you are doing in terms of your career, it may be time for a change because you will be spending an awful lot of time doing it. Find something that you enjoy and move into the role gradually while working in your existing career. The retirement landscape is set to change radically and we need to keep pace physically, mentally and financially.


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